Solar Cheap Enough To Compete Without Subsidies In Some States

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CHARLESTON, W.Va. – A sharp, long-term fall in the price of solar cells has led The Economist magazine and others to declare that in sunny areas with high electricity prices, solar power is now cheap enough to compete without government subsidies.

Rory McIlmoil, program manager for the energy program at environmental consulting firm Downstream Strategies, says that applies to places such as California – but not West Virginia or the East Coast.

“In those areas, solar is competing with other sources of energy that have higher electricity prices than we experience here, which makes it a lot more likely that solar can compete.”

The price of building a solar power plant is nearing where it would be competitive with a new coal plant of a similar size, he says. Both cost more than a natural-gas plant, but he says solar has the advantage of free fuel.

“Natural gas peaker plants have other costs associated with their operation that solar power does not: High fuel and – depending on the size – high maintenance costs for your traditional power plants versus solar power plants.”

The solar industry still depends on significant federal subsidies, although overall, McIlmiol says, the much larger fossil-fuels industries actually receives more in tax breaks. Solar also is limited by the inconsistent nature of the sunshine, although he says power storage and flexible use of the grid are easing some of those issues. Thanks to cheap solar cells, he says, 2010 saw what was then a record level of solar power installed.

“And just one year later, twice that was installed. Roughly 80 percent of the solar power that currently exists in the United States was installed just over the last three years.”

One central criticism of renewable-energy sources such as solar power is that they are too expensive. McIlmoil says that’s rapidly changing, as solar’s explosive growth shows.

More from The Economist is online at economist.com. At current growth rates, the magazine says, wind will surpass nuclear in 10 years.

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